Forgiving Student Loan Debt - A Good Or Bad Idea?

This idea has been floating around the internet for a couple of months. My thoughts? One of the worst ideas ever. Although I have a pile of student loans myself, and I would benefit greatly from a policy like this, I can see how inane this idea actually is. Here is Justin Wolfers on why this idea sucks.



Addendum: I found this piece from the Economist discussing student loan forgiveness.

Many of the anti-Wall Street protesters push the idea of blanket debt forgiveness as a solution. But that is the wrong answer. Higher education is not a guarantee of employment, but it improves the odds immensely. Unemployment rates among university graduates stood at 4.4% on average across OECD countries in 2009. People who did not complete secondary school faced unemployment rates of 11.5%. Much of the debt that students are taking on is provided or guaranteed by the government. Imposing write-offs on all taxpayers to benefit those with the best job prospects is unfair; and ripping up contracts between borrowers and private lenders is usually a bad idea.

I could not agree more. The article goes on to discuss why student loan laws need to be changed in order to ease the burden of student loans in times of economic crisis.